Photo by: Bloombeg
PERTH (miningweekly.com) – A final mining study for the proposed Los Calatos copper project, in Peru, has returned improved economics, including an increase in expected output and a 57% rise in the projected net present value (NPV).
Owner Metminco reported on Monday that the final mine report estimated that the Los Calatos project would produce about 50 000 t/y of copper concentrate over a 22-year mine life, at a C1 cash operating cost of $1.29/lb.
The project was expected to have life-of-mine earnings before interest, taxes, depreciation and amortisation (Ebitda) of $3.82-billion and an NPV of $447-million.
The mining study results compared with initial results, published in June, of life-of-mine production of 45 000 t/y of copper concentrate over a mine life of 17 years, at a C1 cash cost of $1.20/lb.
The initial results had also estimated that the project would have an Ebitda of $2.78-billion and an NPV of $285-million.
Capital cost estimates for the project increased to $655-million, compared with the originally estimated $650-million.
Metminco MD William Howe said the completed mining study provided the company with an excellent building block for the potential development of the Los Calatos project.
“This study clearly demonstrates that there are a number of options available for the development of Los Calatos into a low-cost, long-life mine.”
The completed study estimated that the project would take between 18 and 24 months to build and would produce three-million tonnes a year in the first year of operation. Output would increase to 6.5-million tonnes a year by the third year of operation, with the project producing some 1.1-million tonnes of concentrate over its mine life.
A number of opportunities had, meanwhile, been identified that had the potential to improve project economics, including improved pit designs, detailed mine planning and improved cost estimates.
“The projected demand for copper in the medium term is strong against the backdrop of declining production, owing to recent mine closures and potential debt funding limitations, which will potentially have a positive impact on copper prices earlier than anticipated by the market,” Howe said.
Based on the results of the mining study, Metminco would initiate a development programme to progress the project, subject to the availability of funding. The development programme would include the completion of a prefeasibility study and an in-fill drilling programme to advance the current mineral resource to measured and indicated categories and to facilitate the collection of metallurgical samples.
“Attracting an appropriate partner for Los Calatos remains a priority, with an increasing number of parties currently undertaking detailed due diligence,” Howe said.